FTC Warns Microsoft, Others About Search Engine Results

The Federal Trade Commission (FTC) has sent warnings to seven companies that run popular Internet search engines, requesting that they fully disclose when they include paid advertisers in search results. The list of companies includes Alta Vista, AOL Time Warner (AOL, Netscape), IWon, LookSmart, Microsoft (MSN), and Terra Lycos (Lycos), as well as the now-defunct Direct Hit Technologies. The FTC issued the warnings after a yearlong investigation sparked by last summer's accusations from consumer-advocacy group Commercial Alert, which Ralph Nader cofounded.

"We wanted to raise a concern that we hope \[the search engines\] will take seriously," said FTC Bureau of Consumer Protection Director Howard Beales. "What we saw ... were some pretty clear disclosures and some that weren't." Beales said that no fines are forthcoming, although the agency will continue to monitor the companies' behavior. The FTC pointed out several search-result labels that it found particularly misleading, including "featured listings," "search partners," and "recommended sites." These labels refer to paid advertising, not valid search results, the FTC said. Microsoft said that it changed the way it displays sponsored links on its MSN Search page soon after the FTC began its investigation last July. Netscape has also changed the way it delineates paid ads from search results, an AOL Time Warner spokesperson said.

The FTC warnings are a positive sign for people who are concerned that corporate concerns are tampering with their search results. "We won," Gary Ruskin, executive director for Commercial Alert, said this weekend. "This \[warning\] is the first step in the process of search engines disclosing that their ads are ads."

Of course, I still believe the best search engine available is Google. In addition to keeping ads separate from search results, Google is also the most comprehensive search-engine resource online.